TAMPA, Fla., Nov. 3, 2015
/PRNewswire/ -- Bloomin' Brands, Inc. (Nasdaq: BLMN) today
reported results for the third quarter ("Q3 2015") ended
September 27, 2015 compared to the third quarter ("Q3 2014")
ended September 28, 2014.
Results for Q3 2015 include the following:
- Comparable sales for Outback Steakhouse in Brazil and Korea increased 6.1% and 6.0%,
respectively
- Comparable sales for Company-owned U.S. concepts declined
1.3%
- The Company opened 10 new restaurants including six
International restaurants
- Adjusted restaurant margin was 14.5% versus 13.8% in Q3 2014
and U.S. GAAP restaurant margin was 14.8% versus 13.8% in Q3
2014
- The Company repurchased approximately 2.9 million shares of its
common stock for $60 million in Q3 2015 for a total of
approximately 7.0 million shares for $160
million year-to-date
Adjusted Diluted EPS and Diluted EPS
The following table reconciles Adjusted diluted earnings per
share to Diluted earnings per share for the periods as indicated
below.
|
Q3
2015
|
|
Q3
2014
|
|
CHANGE
|
Adjusted diluted
earnings per share
|
$
|
0.15
|
|
|
$
|
0.10
|
|
|
$
|
0.05
|
|
Adjustments
|
(0.02)
|
|
|
(0.19)
|
|
|
0.17
|
|
Diluted earnings
(loss) per share
|
$
|
0.13
|
|
|
$
|
(0.09)
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
____________________
|
See Non-GAAP Measures
later in this release.
|
CEO Comments
"Our third quarter results position us well to deliver on our
EPS goals for the year. Our International business continues to
deliver strong performance and our ongoing productivity efforts led
to 70 basis points of restaurant margin expansion in the quarter,"
said Elizabeth Smith, CEO. "We knew
that our back half trends would be challenged given the high year
ago base; however, our marketing programs did not break through as
expected. We are preparing for 2016 with significant
innovation driven platforms and new levers to drive comp
sales."
Third Quarter Financial Results
The following summarizes the Company's results for Q3 2015 and
Q3 2014:
(dollars in
millions)
|
Q3
2015
|
|
Q3
2014
|
|
%
Change
|
Total
revenues
|
$
|
1,026.7
|
|
|
$
|
1,065.5
|
|
|
(3.6)
|
%
|
|
|
|
|
|
|
Adjusted restaurant
level operating margin
|
14.5
|
%
|
|
13.8
|
%
|
|
0.7
|
%
|
U.S. GAAP restaurant
level operating margin
|
14.8
|
%
|
|
13.8
|
%
|
|
1.0
|
%
|
|
|
|
|
|
|
Adjusted operating
income margin
|
4.0
|
%
|
|
3.2
|
%
|
|
0.8
|
%
|
U.S. GAAP operating
income margin
|
3.8
|
%
|
|
(0.1)
|
%
|
|
3.9
|
%
|
- The decrease in Total revenues was primarily due to the effect
of foreign currency translation, partially offset by the net
benefit of new restaurant openings and closings.
- The increases in Adjusted restaurant-level operating
margin and Adjusted operating income margin were primarily due to
productivity savings and increased efficiencies in advertising
expenses. These increases were partially offset by commodity and
wage inflation.
- The difference between Adjusted and U.S. GAAP restaurant-level
operating margins in Q3 2015 was due to the favorable resolution of
a payroll tax audit contingency.
- The increase in U.S. GAAP operating income margin in Q3 2015
was primarily due to the lapping of costs related to our
International Restaurant Closure Initiative and impairments related
to the decision to sell our corporate aircraft and Roy's.
Third Quarter
Comparable Restaurant Sales
|
|
|
|
|
|
THIRTEEN WEEKS
ENDED SEPTEMBER 27, 2015
|
|
COMPANY-
OWNED
|
Comparable restaurant
sales (stores open 18 months or more) (1) (2):
|
|
|
U.S.
|
|
|
Outback
Steakhouse
|
|
0.1
|
%
|
Carrabba's Italian
Grill
|
|
(2.0)
|
%
|
Bonefish
Grill
|
|
(6.1)
|
%
|
Fleming's Prime
Steakhouse & Wine Bar
|
|
(0.6)
|
%
|
Combined
U.S.
|
|
(1.3)
|
%
|
|
|
|
International
|
|
|
Outback Steakhouse -
Brazil
|
|
6.1
|
%
|
Outback Steakhouse -
South Korea
|
|
6.0
|
%
|
_________________
(1)
|
Comparable restaurant
sales exclude the effect of fluctuations in foreign currency
rates.
|
(2)
|
Relocated
international restaurants closed more than 30 days and relocated
U.S. restaurants closed more than 60 days are excluded from
comparable restaurant sales until at least 18 months after
reopening.
|
U.S. Segment
Operating Results
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
millions)
|
Q3
2015
|
|
Q3
2014
|
|
%
Change
|
U.S.
|
|
|
|
|
|
Total
revenues
|
$
|
902.5
|
|
|
$
|
915.4
|
|
|
(1.4)
|
%
|
|
|
|
|
|
|
Adjusted
restaurant-level operating margin
|
13.5
|
%
|
|
13.5
|
%
|
|
—
|
%
|
U.S. GAAP
restaurant-level operating margin
|
13.5
|
%
|
|
13.5
|
%
|
|
—
|
%
|
|
|
|
|
|
|
Adjusted operating
income margin
|
7.0
|
%
|
|
6.6
|
%
|
|
0.4
|
%
|
U.S. GAAP operating
income margin
|
6.7
|
%
|
|
6.0
|
%
|
|
0.7
|
%
|
- The increases in Adjusted and U.S. GAAP operating income margin
were primarily due to lower headcount due to the Company's
organizational realignment in 2014. The increase
in U.S. GAAP operating income margin was also due
to lower impairments.
- The difference between Adjusted and U.S. GAAP operating income
margins in Q3 2015 was primarily due to restaurant relocations and
remodel costs.
International
Segment Operating Results
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
millions)
|
Q3
2015
|
|
Q3
2014
|
|
%
Change
|
International
|
|
|
|
|
|
Total
revenues
|
$
|
124.3
|
|
|
$
|
150.0
|
|
|
(17.2)
|
%
|
|
|
|
|
|
|
Adjusted
restaurant-level operating margin
|
18.1
|
%
|
|
16.6
|
%
|
|
1.5
|
%
|
U.S. GAAP
restaurant-level operating margin
|
18.0
|
%
|
|
16.6
|
%
|
|
1.4
|
%
|
|
|
|
|
|
|
Adjusted operating
income margin
|
8.9
|
%
|
|
6.8
|
%
|
|
2.1
|
%
|
U.S. GAAP operating
income margin
|
7.9
|
%
|
|
(2.0)
|
%
|
|
9.9
|
%
|
- The decrease in Total revenues is primarily due to foreign
currency translation, primarily in Brazil, and the impact of the International
Restaurant Closure Initiative. This was partially offset by new
restaurant openings and an increase in comparable sales in
Brazil and South Korea.
- The increase in Adjusted and U.S. GAAP restaurant-level
operating margin was primarily due to higher average unit volumes
and productivity savings partially offset by higher commodity and
wage inflation.
- The increase in Adjusted operating income margin was primarily
due to higher average unit volumes.
- The increase in U.S. GAAP operating income margin was driven by
higher restaurant-level operating margin and the lapping of
expenses related to our International Restaurant Closure
Initiative.
- Foreign currency translation negatively impacted adjusted
income from operations by $4.4
million.
Unallocated Corporate Operating Expense
Certain expenses are managed centrally and are not allocated to
the U.S. or International segment. In Q3 2015, unallocated expenses
at the restaurant operating level were $8.9
million lower than Q3 2014 primarily due to lower general
liability expenses and the favorable resolution of a payroll tax
audit.
System-wide Development
The following summarizes our system-wide development for the
thirteen weeks as of September 27, 2015:
|
JUNE 28,
2015
|
|
OPENINGS
|
|
CLOSURES
|
|
SEPTEMBER 27,
2015
|
U.S.:
|
|
|
|
|
|
|
|
Outback
Steakhouse—Company-owned
|
649
|
|
2
|
|
(2)
|
|
649
|
Carrabba's Italian
Grill—Franchised
|
2
|
|
1
|
|
—
|
|
3
|
Bonefish
Grill—Company-owned
|
207
|
|
1
|
|
—
|
|
208
|
|
|
|
|
|
|
|
|
International:
|
|
|
|
|
|
|
|
Company-owned
|
|
|
|
|
|
|
|
Outback
Steakhouse—South Korea
|
76
|
|
—
|
|
(1)
|
|
75
|
Outback
Steakhouse—Brazil
|
69
|
|
2
|
|
—
|
|
71
|
Other
|
12
|
|
4
|
|
(2)
|
|
14
|
System-wide
development
|
|
|
10
|
|
(5)
|
|
|
Dividend Declaration and Share Repurchases
The Company's Board of Directors declared a quarterly cash
dividend of $0.06 per share to be
paid on November 25, 2015 to all stockholders of record as of
the close of business on November 13, 2015.
On August 3, 2015, the Company's
Board of Directors approved a new $100.0
million share repurchase program. The authorization will
expire on February 3, 2017. During Q3 2015, the Company
repurchased $60.0 million of
outstanding stock under the program. As of September 27,
2015, $40.0 million remains authorized under the share
repurchase program.
Fiscal 2015 Financial Outlook
The Company is reaffirming its full-year 2015 outlook on
adjusted diluted earnings per share of at least $1.27.
The Company has revised guidance on the following items:
- Blended U.S. comparable restaurant sales growth is expected to
be 0.5% to 1.0% versus prior guidance of "approximately 1.5%".
- Total Revenues are expected to be approximately $4.37 billion versus prior guidance of
approximately $4.43 billion.
All other elements of the guidance included in the August 4, 2015 release remain intact.
Selected Preliminary 2016 Financial Outlook
Below are the Company's current expectations for the full-year
2016:
- An increase in Adjusted EPS within the Company's long-term
target of 10% - 15% growth
- Positive comparable U.S. restaurant sales
- An increase in Adjusted operating margin
- Commodity inflation is expected to be approximately 1%
- Foreign exchange headwinds of approximately $12 million dollars, primarily attributable to
the depreciation of the Brazilian real. Most of this impact
will occur in the first half of 2016.
The Company will provide detailed 2016 guidance on the fourth
quarter earnings call in February
2016.
Non-GAAP Measures
In addition to the results provided in accordance with U.S.
GAAP, this press release and related tables include certain
non-GAAP measures, which present operating results on an adjusted
basis. These are supplemental measures of performance that are not
required by or presented in accordance with U.S. GAAP and include
the following: (i) Adjusted restaurant-level operating margin, (ii)
Adjusted income from operations and the corresponding margin, (iii)
Adjusted net income, (iv) Adjusted diluted earnings per share, (v)
Adjusted segment restaurant-level operating margin and (vi)
Adjusted segment income from operations and the corresponding
margin.
Although we believe these non-GAAP measures enhance investors'
understanding of our business and performance, these non-GAAP
financial measures are not intended to replace U.S. GAAP financial
measures. These metrics are not necessarily comparable to similarly
titled measures used by other companies. The use of non-GAAP
financial measures permits investors to assess the operating
performance of our business relative to our performance based on
U.S. GAAP results and relative to other companies within the
restaurant industry by isolating the effects of certain items that
vary from period to period without correlation to core operating
performance or that vary widely among similar companies. However,
our inclusion of these adjusted measures should not be construed as
an indication that our future results will be unaffected by unusual
or infrequent items or that the items for which we have made
adjustments are unusual or infrequent. We believe that the
disclosure of these non-GAAP measures is useful to investors as
they form the basis for how our management team and Board of
Directors evaluate our operating performance, allocate resources
and establish employee incentive plans.
For reconciliations of the non-GAAP measures used in this
release, refer to tables four, five, six and seven included later
in this release.
Conference Call
The Company will host a conference call today, November 3,
2015 at 9:00 AM ET. The conference
call can be accessed live over the telephone by dialing (888)
523-1225, or (719) 325-2323 for international participants. A
replay will be available beginning two hours after the call and can
be accessed by dialing (877) 870-5176 or (858) 384-5517 for
international callers; the conference ID is 910273. The replay will
be available through Tuesday, November 10,
2015. The call will also be webcast live from the Company's
website at http://www.bloominbrands.com under the Investors
section. A replay of this webcast will be available on the
Company's website after the call.
About Bloomin' Brands, Inc.
Bloomin' Brands, Inc. is one of the largest casual dining
restaurant companies in the world with a portfolio of leading,
differentiated restaurant concepts. The Company has four
founder-inspired brands: Outback Steakhouse, Carrabba's Italian
Grill, Bonefish Grill and Fleming's Prime Steakhouse
& Wine Bar. The Company operates approximately 1,500
restaurants in 48 states, Puerto Rico, Guam and 22
countries, some of which are franchise locations. For more
information, please visit bloominbrands.com.
Forward-Looking Statements
Certain statements contained herein, including statements under
the headings "CEO Comments," "Fiscal 2015 Financial Outlook,"
and "Selected Preliminary 2016 Financial Outlook," are not based on
historical fact and are "forward-looking statements" within the
meaning of applicable securities laws. Generally, these statements
can be identified by the use of words such as "guidance,"
"believes," "estimates," "anticipates," "expects," "on track,"
"feels," "forecasts," "seeks," "projects," "intends," "plans,"
"may," "will," "should," "could," "would" and similar expressions
intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. These
forward-looking statements include all matters that are not
historical facts. By their nature, forward-looking statements
involve risks and uncertainties that could cause actual results to
differ materially from the Company's forward-looking statements.
These risks and uncertainties include, but are not limited to:
local, regional, national and international economic conditions;
consumer confidence and spending patterns; challenges associated
with new restaurant development; our ability to preserve the value
of our brands; price and availability of commodities; weather, acts
of God and other disasters; the seasonality of the Company's
business; increases in unemployment rates and taxes; increases in
labor costs; competition; changes in patterns of consumer traffic,
consumer tastes and dietary habits; consumer reaction to public
health and food safety issues; government actions and policies;
foreign currency exchange rates; interruption or breach of our
systems or loss of consumer or employee information; interest rate
changes, compliance with debt covenants and the Company's ability
to make debt payments; the cost and availability of credit; and our
ability to continue to pay dividends. Further information on
potential factors that could affect the financial results of the
Company and its forward-looking statements is included in its most
recent Form 10-K filed with the Securities and Exchange Commission.
The Company assumes no obligation to update any forward-looking
statement, except as may be required by law. These forward-looking
statements speak only as of the date of this release. All
forward-looking statements are qualified in their entirety by this
cautionary statement.
Note: Numerical figures included in this release have been
subject to rounding adjustments.
TABLE
ONE
|
BLOOMIN' BRANDS,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
|
(UNAUDITED)
|
|
THIRTEEN WEEKS
ENDED
|
|
THIRTY-NINE WEEKS
ENDED
|
(dollars in
thousands, except per share data)
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 28,
2014
|
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 28,
2014
|
Revenues
|
|
|
|
|
|
|
|
Restaurant
sales
|
$
|
1,020,131
|
|
|
$
|
1,059,217
|
|
|
$
|
3,307,700
|
|
|
$
|
3,314,179
|
|
Other
revenues
|
6,590
|
|
|
6,237
|
|
|
20,677
|
|
|
20,046
|
|
Total
revenues
|
1,026,721
|
|
|
1,065,454
|
|
|
3,328,377
|
|
|
3,334,225
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
Cost of
sales
|
339,000
|
|
|
348,315
|
|
|
1,083,923
|
|
|
1,080,785
|
|
Labor and other
related
|
286,628
|
|
|
295,532
|
|
|
911,653
|
|
|
909,422
|
|
Other restaurant
operating
|
243,609
|
|
|
269,480
|
|
|
761,928
|
|
|
791,277
|
|
Depreciation and
amortization
|
47,455
|
|
|
48,750
|
|
|
141,316
|
|
|
143,542
|
|
General and
administrative
|
69,623
|
|
|
75,417
|
|
|
218,832
|
|
|
221,733
|
|
Provision for
impaired assets and restaurant closings
|
1,682
|
|
|
29,081
|
|
|
11,715
|
|
|
36,170
|
|
Total costs and
expenses
|
987,997
|
|
|
1,066,575
|
|
|
3,129,367
|
|
|
3,182,929
|
|
Income (loss) from
operations
|
38,724
|
|
|
(1,121)
|
|
|
199,010
|
|
|
151,296
|
|
Loss on
extinguishment and modification of debt
|
—
|
|
|
—
|
|
|
(2,638)
|
|
|
(11,092)
|
|
Other (expense)
income, net
|
(266)
|
|
|
18
|
|
|
(1,356)
|
|
|
171
|
|
Interest expense,
net
|
(14,851)
|
|
|
(13,837)
|
|
|
(40,916)
|
|
|
(45,544)
|
|
Income (loss) before
provision (benefit) for income taxes
|
23,607
|
|
|
(14,940)
|
|
|
154,100
|
|
|
94,831
|
|
Provision (benefit)
for income taxes
|
6,202
|
|
|
(4,110)
|
|
|
41,557
|
|
|
22,839
|
|
Net income
(loss)
|
17,405
|
|
|
(10,830)
|
|
|
112,543
|
|
|
71,992
|
|
Less: net income
attributable to noncontrolling interests
|
594
|
|
|
613
|
|
|
2,918
|
|
|
3,311
|
|
Net income (loss)
attributable to Bloomin' Brands
|
$
|
16,811
|
|
|
$
|
(11,443)
|
|
|
$
|
109,625
|
|
|
$
|
68,681
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
17,405
|
|
|
$
|
(10,830)
|
|
|
$
|
112,543
|
|
|
$
|
71,992
|
|
Other comprehensive
(loss) income:
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
(34,157)
|
|
|
(2,754)
|
|
|
(85,801)
|
|
|
10,969
|
|
Unrealized losses on
derivatives, net of tax
|
(3,884)
|
|
|
(486)
|
|
|
(7,052)
|
|
|
(486)
|
|
Reclassification of
adjustment for loss on derivatives included in net income, net of
tax
|
1,115
|
|
|
—
|
|
|
1,115
|
|
|
—
|
|
Comprehensive (loss)
income
|
(19,521)
|
|
|
(14,070)
|
|
|
20,805
|
|
|
82,475
|
|
Less: comprehensive
(loss) income attributable to noncontrolling interests
|
(11,380)
|
|
|
613
|
|
|
(9,056)
|
|
|
3,311
|
|
Comprehensive (loss)
income attributable to Bloomin' Brands
|
$
|
(8,141)
|
|
|
$
|
(14,683)
|
|
|
$
|
29,861
|
|
|
$
|
79,164
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.14
|
|
|
$
|
(0.09)
|
|
|
$
|
0.89
|
|
|
$
|
0.55
|
|
Diluted
|
$
|
0.13
|
|
|
$
|
(0.09)
|
|
|
$
|
0.87
|
|
|
$
|
0.54
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
121,567
|
|
|
125,289
|
|
|
123,337
|
|
|
125,023
|
|
Diluted
|
124,733
|
|
|
125,289
|
|
|
126,610
|
|
|
128,148
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
$
|
0.06
|
|
|
$
|
—
|
|
|
$
|
0.18
|
|
|
$
|
—
|
|
TABLE
TWO
|
BLOOMIN' BRANDS,
INC.
|
SEGMENT
RESULTS
|
(UNAUDITED)
|
(dollars in
thousands)
|
THIRTEEN WEEKS
ENDED
|
|
THIRTY-NINE WEEKS
ENDED
|
U.S.
Segment
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 28,
2014
|
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 28,
2014
|
Revenues
|
|
|
|
|
|
|
|
Restaurant
sales
|
$
|
897,280
|
|
|
$
|
910,482
|
|
|
$
|
2,930,644
|
|
|
$
|
2,876,965
|
|
Other
revenues
|
5,173
|
|
|
4,953
|
|
|
16,801
|
|
|
16,139
|
|
Total
revenues
|
$
|
902,453
|
|
|
$
|
915,435
|
|
|
$
|
2,947,445
|
|
|
$
|
2,893,104
|
|
Restaurant-level
operating margin
|
13.5
|
%
|
|
13.5
|
%
|
|
15.8
|
%
|
|
15.5
|
%
|
Income from
operations
|
$
|
60,891
|
|
|
$
|
54,734
|
|
|
$
|
281,564
|
|
|
$
|
242,903
|
|
Operating income
margin
|
6.7
|
%
|
|
6.0
|
%
|
|
9.6
|
%
|
|
8.4
|
%
|
International
Segment
|
|
Revenues
|
|
|
|
|
|
|
|
Restaurant
sales
|
$
|
122,851
|
|
|
$
|
148,735
|
|
|
$
|
377,056
|
|
|
$
|
437,214
|
|
Other
revenues
|
1,417
|
|
|
1,284
|
|
|
3,876
|
|
|
3,907
|
|
Total
revenues
|
$
|
124,268
|
|
|
$
|
150,019
|
|
|
$
|
380,932
|
|
|
$
|
441,121
|
|
Restaurant-level
operating margin
|
18.0
|
%
|
|
16.6
|
%
|
|
19.0
|
%
|
|
17.9
|
%
|
Income (loss) from
operations
|
$
|
9,770
|
|
|
$
|
(2,968)
|
|
|
$
|
24,376
|
|
|
$
|
21,539
|
|
Operating income
(loss) margin
|
7.9
|
%
|
|
(2.0)
|
%
|
|
6.4
|
%
|
|
4.9
|
%
|
Reconciliation of
Segment Income (loss) from Operations to Consolidated Income (loss)
from Operations
|
|
|
|
|
|
|
|
Segment income (loss)
from operations
|
|
|
|
|
|
|
|
U.S.
|
$
|
60,891
|
|
|
$
|
54,734
|
|
|
$
|
281,564
|
|
|
$
|
242,903
|
|
International
|
9,770
|
|
|
(2,968)
|
|
|
24,376
|
|
|
21,539
|
|
Total segment income
from operations
|
70,661
|
|
|
51,766
|
|
|
305,940
|
|
|
264,442
|
|
Unallocated corporate
operating expense - Cost of sales,
Labor and other related and Other restaurant operating
|
7,306
|
|
|
(1,641)
|
|
|
14,995
|
|
|
9,681
|
|
Unallocated corporate
operating expense - Depreciation and amortization and General and
administrative
|
(39,243)
|
|
|
(51,246)
|
|
|
(121,925)
|
|
|
(122,827)
|
|
Unallocated corporate
operating expense
|
(31,937)
|
|
|
(52,887)
|
|
|
(106,930)
|
|
|
(113,146)
|
|
Total income (loss)
from operations
|
$
|
38,724
|
|
|
$
|
(1,121)
|
|
|
$
|
199,010
|
|
|
$
|
151,296
|
|
TABLE
THREE
|
BLOOMIN' BRANDS,
INC.
|
SUPPLEMENTAL
BALANCE SHEET INFORMATION
|
(UNAUDITED)
|
(dollars in
thousands)
|
SEPTEMBER 27,
2015
|
|
DECEMBER 28,
2014
|
Cash and cash
equivalents (1)
|
$
|
135,590
|
|
|
$
|
165,744
|
|
Net working capital
(deficit) (2)
|
$
|
(211,966)
|
|
|
$
|
(239,559)
|
|
Total
assets
|
$
|
3,093,187
|
|
|
$
|
3,344,286
|
|
Total debt,
net
|
$
|
1,399,673
|
|
|
$
|
1,315,843
|
|
Total stockholders'
equity
|
$
|
417,518
|
|
|
$
|
556,449
|
|
_________________
(1)
|
Excludes restricted
cash.
|
(2)
|
The Company has, and
in the future may continue to have, negative working capital
balances (as is common for many restaurant companies). The Company
operates successfully with negative working capital because cash
collected on Restaurant sales is typically received before payment
is due on its current liabilities and its inventory turnover rates
require relatively low investment in inventories. Additionally,
ongoing cash flows from restaurant operations and gift card sales
are used to service debt obligations and to make capital
expenditures.
|
TABLE
FOUR
|
BLOOMIN' BRANDS,
INC.
|
RESTAURANT-LEVEL
OPERATING MARGIN NON-GAAP RECONCILIATION
|
(UNAUDITED)
|
|
THIRTEEN WEEKS
ENDED
|
|
(UNFAVORABLE)
FAVORABLE CHANGE
IN ADJUSTED
|
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 28,
2014
|
|
|
U.S.
GAAP
|
|
ADJUSTED
(1)
|
|
U.S.
GAAP
|
|
ADJUSTED
(2)
|
|
QUARTER TO
DATE
|
Restaurant
sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
33.2
|
%
|
|
33.2
|
%
|
|
32.9
|
%
|
|
32.9
|
%
|
|
(0.3)
|
%
|
Labor and other
related
|
28.1
|
%
|
|
28.4
|
%
|
|
27.9
|
%
|
|
27.9
|
%
|
|
(0.5)
|
%
|
Other restaurant
operating
|
23.9
|
%
|
|
23.9
|
%
|
|
25.4
|
%
|
|
25.4
|
%
|
|
1.5
|
%
|
|
|
|
|
|
|
|
|
|
|
Restaurant-level
operating margin
|
14.8
|
%
|
|
14.5
|
%
|
|
13.8
|
%
|
|
13.8
|
%
|
|
0.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
THIRTY-NINE WEEKS
ENDED
|
|
(UNFAVORABLE)
FAVORABLE CHANGE
IN ADJUSTED
|
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 28,
2014
|
|
|
U.S.
GAAP
|
|
ADJUSTED
(1)
|
|
U.S.
GAAP
|
|
ADJUSTED
(3)
|
|
YEAR TO
DATE
|
Restaurant
sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
32.8
|
%
|
|
32.8
|
%
|
|
32.6
|
%
|
|
32.6
|
%
|
|
(0.2)
|
%
|
Labor and other
related
|
27.6
|
%
|
|
27.7
|
%
|
|
27.4
|
%
|
|
27.4
|
%
|
|
(0.3)
|
%
|
Other restaurant
operating
|
23.0
|
%
|
|
23.0
|
%
|
|
23.9
|
%
|
|
23.9
|
%
|
|
0.9
|
%
|
|
|
|
|
|
|
|
|
|
|
Restaurant-level
operating margin
|
16.6
|
%
|
|
16.5
|
%
|
|
16.1
|
%
|
|
16.0
|
%
|
|
0.5
|
%
|
_________________
(1)
|
Includes adjustments
for payroll tax audit contingencies of $2.9 million and $5.6
million for the thirteen and thirty-nine weeks ended September 27,
2015, respectively, which were recorded in Labor and other
related.
|
(2)
|
No adjustments
impacted Restaurant-level operating margin during the thirteen
weeks ended September 28, 2014.
|
(3)
|
Includes an
adjustment for the deferred rent liability write-off associated
with the Domestic Restaurant Closure Initiative, which was recorded
in Other restaurant operating during the thirty-nine weeks ended
September 28, 2014.
|
TABLE
FIVE
|
BLOOMIN' BRANDS,
INC.
|
SEGMENT
RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP
RECONCILIATION
|
(UNAUDITED)
|
|
THIRTEEN WEEKS
ENDED
|
|
(UNFAVORABLE)
FAVORABLE CHANGE
IN ADJUSTED
|
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 28,
2014
|
|
Restaurant-level
operating margin:
|
U.S.
GAAP
|
|
ADJUSTED
|
|
U.S.
GAAP
|
|
ADJUSTED
|
|
QUARTER TO
DATE
|
U.S.
|
13.5
|
%
|
|
13.5
|
%
|
|
13.5
|
%
|
|
13.5
|
%
|
|
—
|
%
|
International
(1)
|
18.0
|
%
|
|
18.1
|
%
|
|
16.6
|
%
|
|
16.6
|
%
|
|
1.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
THIRTY-NINE WEEKS
ENDED
|
|
(UNFAVORABLE)
FAVORABLE CHANGE
IN ADJUSTED
|
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 28,
2014
|
|
Restaurant-level
operating margin:
|
U.S.
GAAP
|
|
ADJUSTED
|
|
U.S.
GAAP
|
|
ADJUSTED
|
|
YEAR TO
DATE
|
U.S. (2)
|
15.8
|
%
|
|
15.8
|
%
|
|
15.5
|
%
|
|
15.4
|
%
|
|
0.4
|
%
|
International
(1)
|
19.0
|
%
|
|
19.0
|
%
|
|
17.9
|
%
|
|
18.0
|
%
|
|
1.0
|
%
|
_________________
(1)
|
Includes adjustments
of $0.1 million of Brazil non-cash intangible amortization for the
thirteen weeks ended September 27, 2015 and September 28, 2014
and $0.2 million and $0.3 million for the thirty-nine weeks ended
September 27, 2015 and September 28, 2014,
respectively.
|
(2)
|
The thirty-nine weeks
ended September 28, 2014 includes an adjustment for the write-off
of $2.1 million of deferred rent liabilities associated with the
Domestic Restaurant Closure Initiative.
|
TABLE
SIX
|
BLOOMIN' BRANDS,
INC.
|
INCOME FROM
OPERATIONS, NET INCOME AND DILUTED EARNINGS PER SHARE NON-GAAP
RECONCILIATION
|
(UNAUDITED)
|
|
THIRTEEN WEEKS
ENDED
|
|
THIRTY-NINE WEEKS
ENDED
|
(in thousands,
except per share data)
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 28,
2014
|
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 28,
2014
|
Income (loss) from
operations
|
$
|
38,724
|
|
|
$
|
(1,121)
|
|
|
$
|
199,010
|
|
|
$
|
151,296
|
|
Operating income
(loss) margin
|
3.8
|
%
|
|
(0.1)
|
%
|
|
6.0
|
%
|
|
4.5
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
Restaurant
impairments and closing costs (1)
|
185
|
|
|
11,573
|
|
|
8,992
|
|
|
16,502
|
|
Payroll tax audit
contingency (2)
|
(2,916)
|
|
|
—
|
|
|
(5,587)
|
|
|
—
|
|
Purchased intangibles
amortization (3)
|
1,047
|
|
|
1,545
|
|
|
3,453
|
|
|
4,535
|
|
Restaurant
relocations, remodels and related costs (4)
|
1,872
|
|
|
—
|
|
|
3,163
|
|
|
—
|
|
Asset impairments and
related costs (5)
|
—
|
|
|
16,952
|
|
|
746
|
|
|
16,952
|
|
Transaction-related
expenses (6)
|
750
|
|
|
—
|
|
|
1,065
|
|
|
1,118
|
|
Legal and contingent
matters (7)
|
1,239
|
|
|
—
|
|
|
1,239
|
|
|
—
|
|
Severance
(8)
|
—
|
|
|
5,362
|
|
|
—
|
|
|
5,362
|
|
Total income from
operations adjustments
|
2,177
|
|
|
35,432
|
|
|
13,071
|
|
|
44,469
|
|
Adjusted income from
operations
|
$
|
40,901
|
|
|
$
|
34,311
|
|
|
$
|
212,081
|
|
|
$
|
195,765
|
|
Adjusted operating
income margin
|
4.0
|
%
|
|
3.2
|
%
|
|
6.4
|
%
|
|
5.9
|
%
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Bloomin' Brands
|
$
|
16,811
|
|
|
$
|
(11,443)
|
|
|
$
|
109,625
|
|
|
$
|
68,681
|
|
Adjustments:
|
|
|
|
|
|
|
|
Income from
operations adjustments
|
2,177
|
|
|
35,432
|
|
|
13,071
|
|
|
44,469
|
|
Loss on disposal of
business and disposal of assets (9)
|
298
|
|
|
—
|
|
|
1,328
|
|
|
—
|
|
Loss on
extinguishment and modification of debt (10)
|
—
|
|
|
—
|
|
|
2,638
|
|
|
11,092
|
|
Total adjustments,
before income taxes
|
2,475
|
|
|
35,432
|
|
|
17,037
|
|
|
55,561
|
|
Adjustment to
provision for income taxes (11)
|
(665)
|
|
|
(11,360)
|
|
|
(3,245)
|
|
|
(18,902)
|
|
Net
adjustments
|
1,810
|
|
|
24,072
|
|
|
13,792
|
|
|
36,659
|
|
Adjusted net
income
|
$
|
18,621
|
|
|
$
|
12,629
|
|
|
$
|
123,417
|
|
|
$
|
105,340
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
$
|
0.13
|
|
|
$
|
(0.09)
|
|
|
$
|
0.87
|
|
|
$
|
0.54
|
|
Adjusted diluted
earnings per share
|
$
|
0.15
|
|
|
$
|
0.10
|
|
|
$
|
0.97
|
|
|
$
|
0.82
|
|
|
|
|
|
|
|
|
|
Basic weighted
average common shares outstanding
|
121,567
|
|
|
125,289
|
|
|
123,337
|
|
|
125,023
|
|
Diluted weighted
average common shares outstanding (12)
|
124,733
|
|
|
128,201
|
|
|
126,610
|
|
|
128,148
|
|
_________________
(1)
|
Represents expenses
incurred for the International and Domestic Restaurant Closure
Initiatives.
|
(2)
|
Relates to a payroll
tax audit contingency adjustment, for the employer's share of FICA
taxes related to cash tips allegedly received and unreported by our
employees during calendar years 2011 and 2012, which is recorded in
Labor and other related expenses. In addition, a deferred income
tax adjustment has been recorded for the allowable income tax
credits for the employer's share of FICA taxes expected to be paid,
which is included in Provision (benefit) for income taxes and
offsets the adjustment to Labor and other related expenses. As a
result, there is no impact to Net income from this
adjustment.
|
(3)
|
Represents non-cash
intangible amortization recorded as a result of the acquisition of
our Brazil operations.
|
(4)
|
Represents asset
impairment charges and accelerated depreciation incurred in
connection with our relocation and remodel programs.
|
(5)
|
Represents asset
impairment charges and related costs associated with our decision
to sell the Roy's concept and corporate aircraft.
|
(6)
|
Relates primarily to
costs incurred with the secondary offerings of our common stock in
March 2015 and March 2014, respectively, and other transaction
costs.
|
(7)
|
Fees and expenses
related to certain legal and contingent matters, including the
Cardoza litigation.
|
(8)
|
Relates to severance
expense incurred as a result of our organizational
realignment.
|
(9)
|
Primarily represents
the sale of our Roy's business.
|
(10)
|
Relates to the
refinancing of our Senior Secured Credit Facility in March 2015 and
May 2014, respectively.
|
(11)
|
Income tax effect of
adjustments for the thirteen and thirty-nine weeks ended September
27, 2015 and September 28, 2014, respectively, are calculated based
on the statutory rate applicable to jurisdictions in which the
above non-GAAP adjustments relate. Additionally, for the thirteen
and thirty-nine weeks ended September 27, 2015, a deferred income
tax adjustment has been recorded for the allowable income tax
credits for the employer's share of FICA taxes expected to be paid.
See footnote 2 to this table.
|
(12)
|
Due to the net loss,
the effect of dilutive securities was excluded from the calculation
of diluted (loss) earnings per share for the thirteen weeks ended
September 28, 2014. For adjusted diluted earnings per share, stock
options of 2,912 are included in the dilutive
calculation.
|
Following is a summary of the financial statement line item
classification of the net income adjustments:
|
THIRTEEN WEEKS
ENDED
|
|
THIRTY-NINE WEEKS
ENDED
|
(dollars in
thousands)
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 28,
2014
|
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 28,
2014
|
Labor and other
related
|
$
|
(2,916)
|
|
|
$
|
—
|
|
|
$
|
(5,587)
|
|
|
$
|
—
|
|
Other restaurant
operating expense
|
16
|
|
|
101
|
|
|
(100)
|
|
|
(1,782)
|
|
Depreciation and
amortization
|
1,310
|
|
|
1,444
|
|
|
3,802
|
|
|
4,239
|
|
General and
administrative
|
2,129
|
|
|
5,726
|
|
|
4,017
|
|
|
7,879
|
|
Provision for
impaired assets and restaurant closings
|
1,638
|
|
|
28,161
|
|
|
10,939
|
|
|
34,133
|
|
Other expense,
net
|
298
|
|
|
—
|
|
|
1,328
|
|
|
—
|
|
Provision for income
taxes
|
(665)
|
|
|
(11,360)
|
|
|
(3,245)
|
|
|
(18,902)
|
|
Loss on
extinguishment and modification of debt
|
—
|
|
|
—
|
|
|
2,638
|
|
|
11,092
|
|
Net
adjustments
|
$
|
1,810
|
|
|
$
|
24,072
|
|
|
$
|
13,792
|
|
|
$
|
36,659
|
|
TABLE
SEVEN
|
BLOOMIN' BRANDS,
INC.
|
SEGMENT INCOME
FROM OPERATIONS NON-GAAP RECONCILIATION
|
(UNAUDITED)
|
U.S.
Segment
|
THIRTEEN WEEKS
ENDED
|
|
THIRTY-NINE WEEKS
ENDED
|
(dollars in
thousands)
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 28,
2014
|
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 28,
2014
|
Income from
operations
|
$
|
60,891
|
|
|
$
|
54,734
|
|
|
$
|
281,564
|
|
|
$
|
242,903
|
|
Operating income
margin
|
6.7
|
%
|
|
6.0
|
%
|
|
9.6
|
%
|
|
8.4
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
Restaurant
impairments and closing costs (1)
|
(20)
|
|
|
—
|
|
|
1,316
|
|
|
4,929
|
|
Restaurant
relocations, remodels and related costs (2)
|
1,872
|
|
|
—
|
|
|
3,163
|
|
|
—
|
|
Asset impairments and
related costs (3)
|
—
|
|
|
6,112
|
|
|
—
|
|
|
6,112
|
|
Adjusted income from
operations
|
$
|
62,743
|
|
|
$
|
60,846
|
|
|
$
|
286,043
|
|
|
$
|
253,944
|
|
Adjusted operating
income margin
|
7.0
|
%
|
|
6.6
|
%
|
|
9.7
|
%
|
|
8.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Segment
|
|
|
|
|
|
|
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
$
|
9,770
|
|
|
$
|
(2,968)
|
|
|
$
|
24,376
|
|
|
$
|
21,539
|
|
Operating income
(loss) margin
|
7.9
|
%
|
|
(2.0)
|
%
|
|
6.4
|
%
|
|
4.9
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
Restaurant
impairments and closing costs (4)
|
205
|
|
|
11,573
|
|
|
7,676
|
|
|
11,573
|
|
Purchased intangibles
amortization (5)
|
1,047
|
|
|
1,545
|
|
|
3,453
|
|
|
4,535
|
|
Adjusted income from
operations
|
$
|
11,022
|
|
|
$
|
10,150
|
|
|
$
|
35,505
|
|
|
$
|
37,647
|
|
Adjusted operating
income margin
|
8.9
|
%
|
|
6.8
|
%
|
|
9.3
|
%
|
|
8.5
|
%
|
_________________
(1)
|
Represents expenses
incurred for the Domestic Restaurant Closure Initiative.
|
(2)
|
Represents asset
impairment charges and accelerated depreciation incurred in
connection with our relocation and remodel
programs.
|
(3)
|
Represents asset
impairment charges and related costs associated with our decision
to sell the Roy's concept.
|
(4)
|
Represents expenses
incurred for the International Restaurant Closure
Initiative.
|
(5)
|
Represents non-cash
intangible amortization recorded as a result of the acquisition of
our Brazil operations.
|
TABLE
EIGHT
|
BLOOMIN' BRANDS,
INC.
|
COMPARATIVE STORE
INFORMATION
|
(UNAUDITED)
|
Number of
restaurants (at end of the period):
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 28,
2014
|
U.S.
|
|
|
|
Outback
Steakhouse
|
|
|
|
Company-owned
|
649
|
|
|
648
|
|
Franchised
|
105
|
|
|
105
|
|
Total
|
754
|
|
|
753
|
|
Carrabba's Italian
Grill
|
|
|
|
Company-owned
|
244
|
|
|
243
|
|
Franchised
|
3
|
|
|
1
|
|
Total
|
247
|
|
|
244
|
|
Bonefish
Grill
|
|
|
|
Company-owned
|
208
|
|
|
196
|
|
Franchised
|
5
|
|
|
5
|
|
Total
|
213
|
|
|
201
|
|
Fleming's Prime
Steakhouse & Wine Bar
|
|
|
|
Company-owned
|
66
|
|
|
66
|
|
Roy's (1)
|
|
|
|
Company-owned
|
—
|
|
|
20
|
|
International
|
|
|
|
Company-owned
|
|
|
|
Outback Steakhouse -
South Korea (2)
|
75
|
|
|
105
|
|
Outback Steakhouse -
Brazil (3)
|
71
|
|
|
59
|
|
Other
|
14
|
|
|
11
|
|
Franchised
|
57
|
|
|
51
|
|
Total
|
217
|
|
|
226
|
|
System-wide
total
|
1,497
|
|
|
1,510
|
|
____________________
(1)
|
On January 26, 2015,
we sold our Roy's concept.
|
(2)
|
In Q1 2015, we
adopted a policy that relocated international restaurants closed
more than 30 days and relocated U.S. restaurants closed more than
60 days are considered a closure. Prior periods for South Korea
have been revised to conform to the current year
presentation.
|
(3)
|
The restaurant counts
for Brazil are reported as of August 2015 and 2014, respectively,
to correspond with the balance sheet dates of this
subsidiary.
|
Chris Meyer
Group Vice President, IR & Finance
(813) 830-5311
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/bloomin-brands-announces-2015-third-quarter-adjusted-diluted-eps-of-015-and-diluted-eps-of-013-300170852.html
SOURCE Bloomin' Brands, Inc.